ZTE, Motorola out of BSNL tender race

TNNOct 9, 2006, 02.12am IST

NEW DELHI: Chinese major ZTE and US-based Motorola have been disqualified from a BSNL tender worth Rs 20,000 crore for procuring and installing GSM network of a capacity of six crore lines. Now the fight is between European vendors — Ericsson, Nokia and Siemens. Only two out of the three will get orders. BSNL will open financial bids on Monday. This is the single largest procurement of GSM equipment in the world.

Motorola and ZTE were eliminated as they failed to meet the "stringent technical criteria stipulated by the tender". Sources said both the companies could have been eliminated on security grounds based on the China factor. While ZTE is a Chinese company, Motorola is sourcing a significant part of its equipment from Huawei, another Chinese vendor.

Interestingly, Nokia and Siemens have already announced that they will merger their mobile and infrastructure divisions to form a new entity called Nokia Siemens Networks. They have applied for approvals from the concerned authorities and the new entity is expected to be legally formed by January.

"As of now Siemens and Nokia are two different entities. They have submitted separate bids. We have not been informed that now legally they are one entity," said BSNL's director planning R L Dube.

BSNL board met on Saturday to finally decide on the technical bids. "We found that there were major deviations from the tender specifications in the case of Motorola and ZTE. Therefore, they were eliminated," Mr Dube said.

There are always some minor deviations from technical specifications mentioned in tender document and generally it is not possible for any company to meet all the conditions in any tender. Therefore, a BSNL committee decides what are the major deviations that disqualify a company from participating in the tender.

In case Nokia and Siemens emerge as the two lowest bidders, the order will be divided among them. Later, if they get the approval for merger of their communication divisions, then the entity will execute the Rs 20,000-crore project. It is not yet clear how BSNL will tackle this problem. It is BSNL's policy to give order to more than one vendor. In the past, BSNL has cancelled tenders that attracted only one bid.

"Nokia and Siemens have announced a global merger to create a combined single entity. The merger of Nokia and Siemens, therefore, creates a situation where effectively only two bidders (Ericsson and Nokia-Siemens Networks) are vying for BSNL's mega order which by tender conditions is to be awarded to two bidders.

Surprisingly, the telecom fraternity world over including BSNL board of directors and evaluation committee has been in full cognizance of the merger of Nokia and Siemens," a bidder who failed to qualify said.